Introduction: Falls are common among older adults. It is reported that approximately 60% of residents of aged care facilities fall each year. This is a major cause of morbidity and mortality, and a significant burden for health care providers and the health system. Among community dwelling older adults, exercise appears to be an effective countermeasure, but data are limited and inconsistent among studies in residents of aged care communities. This trial has been designed to evaluate whether the SUNBEAM program (Strength and Balance Exercise in Aged Care) reduces falls in residents of aged care facilities. Research question: Is the program more effective and cost-effective than usual care for the prevention of falls? Design: Single-blinded, two group, cluster randomized trial. Participants and setting: 300 residents, living in 20 aged care facilities. Intervention: Progressive resistance and balance training under the guidance of a physiotherapist for 6 months, then facility-guided maintenance training for 6 months. Control: Usual care. Measurements: Number of falls, number of fallers, quality of life, mobility, balance, fear of falling, cognitive well-being, resource use, and cost-effectiveness. Measurements will be taken at baseline, 6 months, and 12 months. Analysis: The number of falls will be analyzed using a Poisson mixed model. A logistic mixed model will be used to analyze the number of residents who fall during the study period. Intention-to-treat analysis will be used. Discussion: This study addresses a significant shortcoming in aged care research, and has potential to impact upon a substantial health care problem. Outcomes will be used to inform care providers, and guide health care policies.